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Jan 03, 2018 01:04 PM IST | Source: Moneycontrol.com

Goldman Sachs initiates Buy on JSW Steel; expects capex to drive growth, realisations

Goldman expects JSW's dividend payout to remain stable at 15 percent over the medium term.

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Global investment firm Goldman Sachs has initiated coverage with Buy rating on JSW Steel as it is best placed to benefit from shift in macro-economic landscape. The stock price rallied nearly 3 percent intraday Wednesday.

The research house has set a target price at Rs 315 per share as it expects company's capex to drive growth and realisations.

Goldman expects strong free cash flow generation and deleveraging going ahead and also expects net debt to EBITDA to reduce to 2.6x by FY20 versus 4.2x in FY17.

The brokerage firm expects company's revenue/EBITDA/net profit to grow at a CAGR of 8.6/14/28 percent over FY17-20. "We expect return on equity / return on capital employed to expand to 23/13 percent by FY20 versus 17/8 percent in FY17," it said.

Goldman expects JSW's dividend payout to remain stable at 15 percent over the medium term.

At 12:12 hours IST, the stock price was quoting at Rs 269.10, up 1.78 percent on the BSE.
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